OECD Trims Canada's GDP Growth, Ups Inflation Forecasts for This Year Amid Middle East Conflict

10:10 AM EDT, 03/26/2026 (MT Newswires) -- The Organisation for Economic Co-operation and Development Thursday presented its 2026 Economic Outlook Interim Report, in which it stated that the conflict in the Middle East is testing the resilience of the global economy.

Global growth remained resilient before the conflict, but rising energy prices and uncertainty now weigh on the outlook, noted the OECD. Global GDP growth is projected to remain broadly stable at 2.9% in 2026 before edging up to 3.0% in 2027, sustained by robust technology-related investment and gradually lower effective tariff rates. However, the evolving conflict in the Middle East weighs on growth and generates significant uncertainty around global demand.

Inflation pressures will persist for longer with G20 inflation now expected to be higher in 2026 than previously projected, reflecting the surge in global energy prices, it added. G20 inflation is projected to be 1.2 percentage points (pp) higher than previously expected this year at 4.0%, before easing to 2.7% in 2027 with an assumed fading of energy price pressures. Core inflation in advanced G20 economies is expected to weaken, from 2.6% this year to 2.3% in 2027.

The OECD now sees Canada's GDP growth at 1.2% this year, or 0.1pp lower than its December forecast, and an unchanged 1.7% in 2027. GDP growth was 1.7% in 2025.

Inflation is projected to average 2.4% this year, or 0.3pp higher than expected in December, and at an unchanged 2.0% in 2027. Inflation averaged 2.1% in 2025.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.